New figures have revealed UK construction output fell steeply in June due to uncertainty over the outcome of the EU referendum.

The latest Markit/CIPS UK Construction PMI posted 46.0 in June, down from 51.2 in May and dropping below the 50.0 threshold for the first time since April 2013.

In addition, the latest reading signalled the weakest overall performance since June 2009.

The Brexit uncertainty led to a steel decline in residential building and commercial work, including a further reduction in new invitations to tender.

Residential construction was the worst performing sub-category of activity, falling at the fastest pace since December 2012. Civil engineering activity remained broadly stable in June, while commercial building work saw a sharp loss of momentum and posted one of its weakest readings for six-and-a-half years.


David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, said "ambuiguity and indecision" has "flung the sector into unknown territory".

"Gloom and fragility descended on the sector with the steepest drop in new orders since December 2012," he said.

"Caused by the continuing insecurities in both the global and UK economies and the hesitancy shown by clients to commit to projects before the EU referendum, overall activity was at its frailest for seven years.

"The housing sub-sector took the most significant hit, with the biggest fall in activity since December 2012. Commercial building was a close second showing a similarly disappointing result, with a drop in activity not seen since February 2013. Delivery times, employment and crucial supplies were also impacted by the ongoing uncertainty.

"Though the majority of responses, around 80% were received before the Brexit result, the continuing ambiguity and indecision has flung the sector into unknown territory. Firms will likely look towards any remedies the Bank of England and the UK Government can offer if the situation worsens post- Brexit.

"The only glimmer of light through the brickwork is the rate of decline was not as sharp as that experienced during the last recession. But, with business confidence at a three-year low, and purchasing activity at its lowest level for six and a half years, this is likely to offer little comfort."

(LM)